Thursday, June 29, 2006

Gack

Plans in Progress

Of course, with all of the walls opened up due to flooding, we've got to rework a few things. Check out the sketches the architect is working on!

Here's the floor plan of the house as we bought it. Main floor - the plans are to move the kitchen to a larger room, move the laundry area from the master bath to the center hall leaving space for a walk-in closet, and relocate the stairs to be less steep/narrow.Finished attic - there's a landing at the top of the new stairs, the existing bath will be enlarged, and the unfinished space on either end can be finished for another bedroom and play room/study.Basement/garage space (created by elevating the house) - there will be a mudroom at the bottom of the new stairs, opening to the workshop and garage area on one side, and a half-bath and utility room on the other.

The degree to which the basement will have wide open spaces is determined by how much we can afford to spend on beams instead of columns. But at any rate, there will be parking for two cars and a 14x42 workshop.

Cool, eh? Obviously we'll see what has to be changed with the engineer meets with the contractors and they work up how much this fiasco will cost.

Wednesday, June 28, 2006

Wonders never cease

The New Orleans Safety and Permits office. City Hall. June. Can you think of anything scarier? Well, no one could be more surprised than me that I was able to get in and out, with the form I needed signed AND a permit for the first $200K of work on That Old House, in less than 15 minutes. They were nice, they were efficient, my two-year-old daughter didn't even have time to start whining. Who'd have thought?

Regarding Linda's comment on my last post, we are planning to sell our first house, Chateau Danneel, in the next year. It recently appraised around 2.5 times what we paid for it eight years ago, so we think it's time to take what we can get for it and run. I don't want to have my entire net worth invested in local real estate for obvious reasons, and the maintenance on two rental properties is more than I want to take on.

Here's a little background on the house we're trying to buy now. I'm strongly tempted to call it Maison Derriere after one of my favorite Simpsons episodes, since it is, after all, in back of our primary house. However, it's an 1800 sq ft 50's split-level ranch, so calling it "Maison" anything seems a bit grandiose. Right after Katrina, we got in touch with the owners and made them an offer for the value of just the land, assuming the house was a tear-down. It sits on a lot that was originally part of our house's lot, but was subdivided in the 50's. We liked the idea of having a huge yard. The owners had been told the house could be sold for its pre-Katrina value, or more, if they waited until the panic was over, so we didn't reach a deal then.

Fast forward to last month, and I saw a For Sale sign on their yard. I called my agent to get the skinny, he told me the house was gutted, empty, and open, so Mr. N and I took a look. It's in surprisingly good shape. The lowest level, which is at ground level, had tile floors and cement block walls, so is basically fine. The middle level, where the kitchen, living and dining rooms are, has been gutted, and the upper floor, where the bedrooms are, is totally fine. The wood floors upstairs had evidently been covered by wool carpets for 50 years and are in remarkably good shape. Most importantly, structurally everything seems stable. Nothing is slanted, the doors work upstairs, there aren't cracks in the remaining plaster... unlike what we have at That Old House.

I had my agent run the comps, and got my contractor in to give us a rough estimate of what it would cost to replace the electrical and HVAC systems and finish out the middle floor. Ultimately we agreed with the sellers on a price in the middle of what we each originally had contemplated. The market in this area is such that even if we just flipped the place, selling it immediately after making repairs, we'd come out ahead. But given the amount of work that remains to be done on TOH, it wouldn't be a bad thing for us to have someplace in town to live until we're finally able to move in there.

So the plan is that we'll fix it up, live in it for a little while, then rent it out. As far as I'm concerned, the lowest level can be used for utility space and a play room for the kiddo, but we're not putting anything down there we can't stand to lose in a storm. I'll tell potential tenants the same thing. We're close to the university district so it's not a problem finding good tenants, and living right next door will make maintenance easier. Plus, we can still take out the fence between the lots and have a big yard. If the worst happens and there is another big flood, we'll take our flood settlement, put it in the bank, and tear the little house down and have an even bigger yard.

Major financial acrobatics are ongoing, of course. We're refinancing Chateau Danneel (the first house), getting enough cash out to buy Maison Derriere. Then when we sell Chateau Danneel next year, we own the little house outright, and can make enough rental income off of it to make up for not having the income from CD. It's fascinating how having some equity in a house I bought when I was 24 and had no idea what I was getting into now allows me to go to a lawyer's office, sign a bunch of papers, and come out with keys to a new house - without actually having spent any "real" money for it. It's a mad world.

Monday, June 26, 2006

A Quick Review

There has been lots of activity down here on the legal and financial fronts, less so on the actual construction front, but I guess the first two really have to be resolved before the third can proceed, right? Here are the highlights:

1) OK, I've admitted before to some degree of insanity. Keep that in mind when reading that we are in the process of buying ANOTHER house in New Orleans. It's the house directly behind ours, and for a variety of reasons the owners (a couple in their 90's) are selling it for pretty much a song. It's a 50's split-level, smaller than our house, but structurally sound and needs a lot less work than ours does. The plan is to finish it out, live there for a few months while our house is being worked on, then keep it as a rental. We can pull out the fence between the yards and have a nice big garden.

2) We've been waiting for six months for the foundation contractor to elevate our house and replace the foundation. They're that busy. In the meantime we're talking to the architect and getting plans drawn up. This is totally the money-pit-cliche renovation that started out as a simple kitchen redo and has become a massive whole house project.

3) The insurance company hired a big-guns downtown firm to fight our little lawsuit about the agent forgetting to write our flood contents policy. We're in the right, of course, so we'll probably wind up with some kind of settlement, but it's been lots of excitement for our lawyer.

4) We've qualified for a ridiculously-low-interest loan for any repairs that exceed our insurance settlement. Further proof that if you work hard enough, there's really no limit to how much debt you can achieve.